Original | Odaily Odaily
Author | Yan Chen
On January 15, 2024, the results of the Iowa primary election for the US presidential election were released. This was the first Republican primary election, and Trump won the first battle with an absolute advantage. This US presidential election started with the Iowa primary on January 15, and its results have always been regarded as an important "barometer" of the US presidential election. Unsatisfactory primary results will directly affect morale and the confidence of supporters and donors in candidates, further increasing the difficulty of the campaign.
After his great victory in the Iowa Republican primary, Trump, a politician who is good at using social media to guide middle-class voters, also reposted his leading winning rate on the crypto prediction market Polymarket many times on the Truth Social platform he founded.
Next, Odaily Odaily will introduce the basic information and gameplay of Polymarket.
Polymarket Basic Information
Polymarket is a decentralized prediction market platform built on Ethereum's L2 Matic Network and based on the AMM mechanism. Users can make predictions and bets on various public events (such as US presidential candidates, the situation in the Middle East, etc.).
In June 2020, Shayne Coplan, an early Ethereum supporter, founded Polymarket.
In October 2020, Polymarket launched its beta version and continued to update it. Since then, it has experienced an explosion and completed a $4 million financing in the same month, led by Polychain Capital, with participation from institutions such as 1coinfirmation and ParaFi, as well as investors such as former Coinbase CTO Balaji Srinivasan, Aave founder Stani Kulechov, Synthetix founder Kain, and Tagomi President Marc Bhargava.
In the bear market of 2022, Polymarket completed a $25 million Series A financing, with participation from General Catalyst*, Polychain, and Joe Gebbia. In the context of the bear market at that time, Polychain Capital once again appeared on the list of investors, which was enough to show that the top VCs were optimistic about the crypto prediction market.
How to play Polymarket
1. Click sign up and log in using your Google account/other email or crypto wallet
Polymarket login interface
2. Transfer USDC (Polygon) or use legal currency to purchase cryptocurrency
Deposit Page
3. Choose a topic of your interest and place a bet (maximum bet amount is no more than $10)
Most predictions on Polymarket are about whether a certain event will happen or not, and are more like binary options in structure, that is, the winners share the losers' bets according to the bet ratio.
There are also predictions with more options, such as "How many tweets will Musk send?", which are more complicated to calculate, but the final result is still that there is only one option that is the final winner. The basic logic of "the loser's bet amount is divided by the winner" remains unchanged.
Competitive advantages behind the rapid growth of performance
Driven by a series of hot events such as the 2024 US election, whether Bitcoin and Ethereum spot ETFs will be approved, and CZ's sentence, Polymarket's business performance has been booming.
Dune data shows that on January 10, 2024, when the SEC approved multiple spot Bitcoin ETFs, the on-chain prediction market Polymarket had a trading volume of more than $5.7 million, higher than OpenSea. Polymarket's trading volume in January exceeded $51.34 million, a monthly record high. In the following months, its trading volume remained at around $40 million.
Polymarket’s monthly trading volume
Polymarket also performed very well in terms of financing. On May 14, 2024, Polymarket completed a $45 million Series B financing round led by Founders Fund and other investors, with participation from Ethereum co-founder Vitalik Buterin and others. It is worth noting that Vitalik has forwarded predictions on the Polymarket platform and expressed optimism about the crypto prediction protocol.
Compared with similar competitors such as Augur, Polymarket has the following highlights.
The operation team has excellent "network sense"
Compared with other products in the same field, the biggest advantage of Polymarket is that its operation team has an extremely sensitive nose for hot spots. The betting items are updated very quickly and are close to hot spots. For example, after Roaring Kitty, a user of the X platform who once called on retail investors to long on GameStop stocks and fight against financial institutions’ short positions in the WallStreetBets community, updated X’s status again after three years and tweeted frequently, Polymarket quickly created relevant betting items.
Roaring Kitty betting entries
Active market transactions lead to a relatively active community
Unlike other crypto prediction markets, each betting entry on Polymarket has its own comment section (similar to a simplified version of Zhihu or Quora). Users can speak up and analyze other users’ thinking logic to correct their own predictions. The active comment section is also an important reason for users to use Polymarket.
When users place bets on Polymaket and look for other people’s bets on the same item, they will more or less refer to the discussion posts on Polymarket. Over time, more external users will be converted into Polymarket users.
Surprisingly, in terms of the discussion of certain hot political topics alone, Polymarket's comment volume data has surpassed Quora, which is known as the "American version of Zhihu."
Quora's previous question about whether Trump won the election (100+ comments)
On Polymaket, everyone's comments are based on real bets, and driven by their own interests, users are using the Polymarket comment area seriously. To some extent, Polymarket solves the biggest pain point that plagues many SocialFi projects - the lack of active use by real users.
The picture shows the comments section of Polymarket discussing Trump (260 comments in total)
A more liquid option
Polymarket adopts the AMM trading mechanism and introduces liquidity providers (LPs), which effectively solves the problem that users have difficulty reselling after purchase. Users will incur a 2% fee for betting transactions and will pay it to liquidity providers.
Assuming that the official takes on the role of a partial liquidity provider, it can not only provide users with better choices, but also become an important supplement to the project's revenue source.
Provide a channel to purchase cryptocurrency, convenient for traditional users
Polymarket supports users to directly use VISA cards, MasterCard, Apple Pay and Google Pay to purchase USDC for betting, without having to buy coins and bind wallets first, which is very convenient for traditional users.
Purchase interface
Better betting experience
Polymarket's solution based on Matic Network solves problems such as high transaction fees and long transaction time, allowing it to provide users with fast and low-fee transactions.
What are the risks?
Winning or losing does not matter.
Polymarket's aggressive operating style is one of the reasons for its success, which also led to Polymarket's tweet marketing in April this year due to several tweets containing inappropriate language (especially the offensive word "Retardio" in the text) released by the official X account. Afterwards, Polymarket issued an apology letter for the inappropriate use of tweets, fired the relevant personnel and launched an internal review, which shows its ability to handle crisis public relations.
At the same time, the Polymarket platform involves a lot of sensitive political content, as well as betting items for celebrity "cricket fighting" competitions, which has also attracted fierce criticism from some users.
in conclusion
The Polymarket team's excellent operations and product design have jointly made this product a success.
Next, as major countries around the world enter election years one after another (especially the heated US election), more users will flock in. Polymarket's comment area function, niche betting items, and exit liquidity experience may bring more users to Polymarket, forming a positive growth feedback.
